Debt politics as usual? Reforming the sovereign debt restructuring regime after 2008

In the wake of the 2008 financial crisis and costly debt restructurings in Greece and Argentina, the sovereign debt restructuring regime (SDRR) has been reformed in a number of ways. Taken together, these reforms have had a mixed impact in comparison to existing governance arrangements put in place during the early 2000s: changes to IMF lending rules have weakened the regime, reforms to sovereign bond contracts have strengthened it, and a UN-centred initiative to construct a new multilateral debt restructuring framework has had little impact in either direction. The pattern of post-2008 change reveals that reforms focusing on pre-defined rules to trigger debt restructuring (the IMF lending reforms) are less likely to succeed than those focused on the process of restructuring once the decision to restructure has been taken (contract reforms). It also shows that efforts to build comprehensive, multilateral legal frameworks for debt restructuring (the initial goal of the UN initiative) face enormous obstacles. At a more theoretical level, the post-2008 experience highlights the enduring power of the United States and leading European states to shape outcomes in this sector, as well as the need to embrace eclectic theoretical frameworks in analysing the complicated politics of SDRR reform.